Project Portfolio Management – Process first or tool first?

Project Portfolio Management – Process first or tool first?

This is not only an important question but also a tricky one.  It is a classic “which came first: the egg or the chicken?” Every organization has processes and everyone has tools to implement these process.  We can’t give you a black and white answer as there are no rules set in stone. Buy we can help you clear the confusion and help you to make the right decision.

On one hand the proponents of the process-first camp argue that buying an online tool and expecting to improve productivity and workflow is akin to buying exercising materials and expecting to lose weight. It is true that just buying a software system and hoping everything will fall in place is not necessarily the right way to begin. One has to do the diligent work to set up structures, processes or workflows and reporting systems involving different stakeholders and identifying their cross-functional interdependencies according to the strategy and goals of the organization.

They believe that implementing software tools before the basic processes are in place will only lead to a decline in productivity as the tasks are executed in an inefficient framework.

On the other hand, the tools first camp argue that a company is better off starting with the pre-configured “out-of-the-box” solution (workflows, document templates, data models, etc.) and use the software as a means to define the right process. They believe that this can save a lot of time and money and avoid large scale configuration and customization.

They tend to believe that a tried and tested process or method elsewhere should work for any company.

However, the truth is somewhere in between because both process and tools or software’s go hand in hand. You can either implement the processes first and then customize a tool according to it or else buy a software first and use ready-made processes. If you are huge multinational company present in the market place for a long time it might be a good idea if you set your processes and goals first and then choose a customized solution.

In case you are a small operation, an early stage company or a start-up, you may very well buy an off the shelf software tool (which includes workflows, document templates, data models, etc.) and ready-made processes. This could help you save a lot of time.

Either ways, before you implement both, you need to ask a few questions:

What is the cost versus benefit ratio?
As mentioned above if you are a small operation It is self-evident that It will be cheaper for you to purchase an online tool and implement a predefined process. But imagine a scenario where your company outgrows its ability to gain significant operational performance improvement thanks to acquisition, mergers and international expansion. At this point, you might want to reevaluate the software investment required, its costs and its benefits.

What is the problem at hand?
Is the company facing problems caused by a poor process design, poor process execution, or poor information needed to make good decisions? Or if the company has a defined process may be there are significant communication gaps and no real-time view on the work flow to make the right choices and allocate resources accordingly? In the former scenario, the process should be revaluated and redefined. A software solution might not help. In the latter case may be a software system can help by providing the right information to the user, manager, or executive at the right time, allowing them to make faster and better decisions.

What is the user adoption level in your company?
Pay close attention to your organization’s readiness and ability to adopt a software tool. Implementing software too early in your project management maturity level can backfire if user adoption is not considered early and often. The internet is full of horror stories of failed enterprise software implementations. Also stakeholders could revolt if you impose on them an off the shelf solution without involving them in the decision process. So it is a good idea to involve them in every step of the decision process from system selection to system design and rollout.

At what stage of project maturity are you in your organization?
Different companies are on various maturity levels. Are you a small company running few projects which are visible to all stakeholder and you have less data to analyze? Early-stage companies may benefit by implementing business process already defined and embedded in a software system. Or are you a company with global operations running a variety of projects and programs at the same time with complex cross-functional communication and various interdependencies? Do you have a dedicated PMO? If yes, in this case you have different sets of challenges. Altering well-ingrained processes to match the out-of-the-box software may not only be practical but can also negatively impact adoption.

Scope of the software required?

Project management software tools range from narrowly focused task based solutions designed to manage day to day operations of a project in a company to broad enterprise-wide Project Portfolio Management tools with a variety of modules or functionalities such as: demand management, project planning, resource management, timesheet management, documents management, reporting tools, workflow management and budget or cost management.

The choice of your tool will depend on your company’s maturity level. A progressive and phased approach of enabling processes with software tools allows you to mature your process first, one step at a time. That is enable the process with a proper tool, demonstrate measurable results, and demonstrate a success before moving on to the next process. Done well, the positive return on investment can help justify or even pay for the next step in your project portfolio transformation journey.

So in a nutshell, it depends according to the needs of an organization, its maturity level and its future goals. One way to resolve this “tool first or process first” dilemma is to have a good upfront awareness of the kinds of tools and its functionalities available while developing your process. To conclude, define and structure the process with business objectives in mind, but optimize the process, run it efficiently and own it with a software solution.

Maybe you might want to learn more about NQI Orchestra – a project portfolio management solution. Click here to learn more.